Monday, August 29, 2011

Links Aug 29

Analysis: City gears up to kill new finance tax Bureau of Investigative JournalismAug 26 - Nick Mathiason observes: "Since the crash there has been little meaningful reform on bankers’ pay, tax abuse and transparency in markets, despite wide public desire that the City should be made to pay for some of the mess western economies are now in. And while many economies hang in the balance, profits in many financial sectors are back up to pre-crash levels and bankers’ pay is back in the stratosphere. But the City lobby is powerful ... Merkel and Sarkozy are going to need great powers of persuasion to force the EU financial tax agenda beyond the Eurozone and into London’s markets.

Tax Havens and Bank Secrecy: The "death" of the London G20 Les Echos (In French)
Aug 26 - Observing how the Swiss-German deal (thus also the Swiss-UK deal) is turning its back on the commitments of the G20 in April 2009. Only asystem of automatic exchangeof bank informationand beneficial ownership cansimultaneouslyensure bettertax revenuesand restoregreater tax fairness.The agreementturns its back onthese two objectivesthat remainmore than everessential.Itonly remains tohope thatother statesdo not followthis path...

Dismantle Dutch fiscal shelters SOMOAug 22 - "In a press release from 9 August, the Dutch Central Bank (De Nederlandsche Bank, DNB) announced with pride that the Netherlands topped the IMF’s world ranking for foreign direct investment ... This should not inspire pride but should provoke critical questions on the part of the DNB, particularly in times of financial instability. ... Countries like the Netherlands, Switzerland, the Cayman Islands, Ireland and Luxemburg always score within the top ten in areas of largest incoming and outgoing portfolio investments and interbank loans." See also our blog on the issue here by Koos de Bruijn.

Indian Ruling Undermines Mauritian DTA Tax-NewsAug 15 - A welcome ruling from the Mumbai High Court, involving the US multinational AT&T, has cast into doubt the use of structures in Mauritius to mitigate tax paid in India.
JPMorgan to Pay $88.3 Million for Sanctions Violations New York TimesAug 25 - On JP Morgan Chase being caught out for turning a blind eye to sanctions-breaking transactions. "Treasury officials called the bank’s actions 'egregious' and said that JPMorgan’s 'managers and supervisors acted with knowledge of the conduct constituting the apparent violations and recklessly failed to exercise a minimal degree of caution or care.'” See here and here for more examples of 'egregious' behaviour by other players in the international banking field.
Should Banks Profit From Dictators’ Money? Transparency InternationalAug 26 - On the handling of looted assets: "Why should they stay with the banks who have failed in their due diligence, where governments cannot use it and where they will continue to accrue interest for the banks? They should rather be kept in escrow accounts run by international development banks, so that they can help the governments trying to help their countries recover from years of corruption, graft and misappropriation. Transparency International has called on the Group of 20 leading economies to make this happen."

A Brief History of the Foreign Corrupt Practices Act Task Force on Financial Integrity and Economic DevelopmentAug 25 - "As many of our readers know, the Foreign Corrupt Practices Act (FCPA) is under assault by the Chamber of Commerce and some members of Congress. This valuable statute prohibits domestic companies from bribing foreign officials for the purpose of obtaining or retaining business opportunities abroad and has a purposefully broad reach, extending to any company operating globally with securities registered in the U.S." See the video for an excellent history of the FCPA and the international movement to curb bribery.

Rich Man Whining Huffington PostAug 24 - Prof Edward D. Kleinbard comments on an article by Harvey Golub, the former CEO of American Express (and briefly the Chairman of AIG): "Golub directed his umbrage at Warren Buffett and President Obama, for suggesting that the rich in general, and by implication Mr. Golub in particular, should pay somewhat higher income tax rates than they do now ... Golub's article accurately reflects the ethos of a large swath of the privileged classes."

Corporations Are People... Who Should Pay More Taxes Citizens for Tax JusticeAug 25 - "Of course, it’s true that corporate earnings eventually go to people and that taxes on corporate earnings are borne by people. Those people are primarily the shareholders ... The serious problem is that the shareholders who own these corporations are not paying enough, thanks to the loopholes that allow corporations like GE, Boeing, Verizon and others to avoid taxation entirely."

Data on Top 20 Corporations Using Repatriation Amnesty Calls into Question Claims of New Democrat Network Citizens for Tax JusticeAug 26 - "As the CRS report mentioned above concluded, the profits repatriated under the 2004 amnesty were used to fund increased stock dividends and stock buybacks. They did not lead to additional job creation or investment in the United States. Rewarding corporations that shift profits to offshore tax havens is a terrible policy. It was tried before, it failed, and it should not be repeated.

Money laundering is surging EL PAÍS(In Spanish)
Aug 15 - On the rise in money laundering, often using tax havens, that siphons billions of Euros from Spain and constitutes a large part of political corruption monies.
Of course we need tax havens Tax Research UKAug 29 - Richard Murphy observes: "There has been an interesting outbreak of pragmatism that endorses tax haven behaviour ... all of it the result of George Osborne’s [UK Chancellor of the Exchequer] Swiss tax deal. So let me be clear, of course we need tax havens. Without them we couldn’t undertake mass tax evasion, hide multinational company profits from tax, launder drug money, launch attacks on the tax systems of democracies..." and more, including "provide asymetric information to markets that increase risk and threaten global financial collapse".

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The Tax Justice Network (TJN) is an international, non-aligned network of researchers and activists with a shared concern about the harmful impacts of tax avoidance, tax competition and tax havens.
www.taxjustice.net